South Korea prioritizes fiscal discipline, records smallest budget increase in 20 years.

By Jihoon Lee

SEOUL (Reuters) – South⁢ Korea Plans to Increase Budget Spending for 2024

South Korea’s government plans to raise budget spending to nearly $497 billion‍ for 2024, but the proposed increase is the smallest in ‍two decades ​as authorities ​prioritise ⁤fiscal discipline amid weakening tax revenue due to slower economic growth.

Annual Spending Plan

In its annual spending plan released on Tuesday, the finance ministry set total government expenditure‍ for ​2024 at 656.9 trillion won ($496.70 billion), up ​2.8% from 2023.

That is smaller than this year’s 5.2% increase and the smallest-ever boost ⁤since fiscal statistics were last revised at the beginning of 2005, according to the ministry, excluding supplementary budgets.

The conservative Yoon Suk Yeol administration has prioritised improving the government’s fiscal position since its ⁣term began in May 2022, refraining from splurging taxpayer money to⁢ boost growth and emphasising the role of the private sector.

It partly reflects weak⁢ tax revenue, estimated to drop by a record 8.3% in 2024 and bring down⁢ next⁣ year’s total government income by 2.2% to 612.1 trillion won, amid⁤ slow economic growth and as the government seeks further tax cuts, especially for companies.

The government is forecasting economic growth⁢ to weaken to a⁣ three-year low of 1.4% this year, after expanding 2.6% in 2022 and 4.3% in 2021. It expects the economy to grow 2.4% ‌in 2024.

South Korea’s fiscal deficit will widen to 3.9% of GDP next year, from an estimated 2.6% this year,⁤ the ministry said, adding that it will bring back ‌the ratio below 3% from 2025. The debt-to-GDP ratio ⁤will rise ⁢to ‌51.0% from 50.4%.

“It was a difficult⁤ decision the government made to hold​ onto sound financing,” Finance Minister Choo Kyung-ho said.

About 23 trillion​ won worth of projects deemed inefficient⁤ will be scrapped or scaled down, with‌ more spending on social welfare, childbirth support, investment in key industries, public safety and disaster prevention, among others.

Big spending increases‌ include social welfare, up by 7.5% to 242.9 trillion won, defence up 4.5% to 59.6 trillion won and‌ corporate support by 4.9% to 27.3⁤ trillion won.

The government‍ will issue 158.8 trillion won of treasury⁤ bonds in 2024, down from a total of 167.8 trillion won planned for this year. The net increase in treasury bonds is projected at 50.3 trillion won.

It will issue a maximum $1.3 billion ‍worth of foreign exchange stabilisation bonds, compared with $2.7 billion set for this year, and ​18 ⁣trillion won worth of the bonds in ⁢local currency, its first⁢ issuance of the kind⁣ since 2003, to lower the borrowing cost.

The budget plan will be submitted to the national assembly on Friday, Sept. 1.

($1 = ​1,322.5400 won)

(This story has been corrected to fix the year to 2003, from 2013, in paragraph 12)

(Reporting by Jihoon Lee; Editing by Shri ​Navaratnam)

Former senior Trump White House aide Peter Navarro testified Monday in a federal courtroom on charges of defying a Democrat-appointed House J6 Select Committee ‍subpoena.

UNC Chapel Hill goes on lockdown and Judge Chutkan⁤ sets Trump’s alleged Election ⁣Interference trial date just before Super Tuesday.

National Legal and Policy Center legal counsel Paul Kamenar says former Trump ⁤Chief-of-Staff Mark Meadows has “a good chance” in succeeding in his bid⁣ to move ‍his trial on ‌charges of tampering with the 2020 election ‌to federal ‌court.

Lawyers for Bryan Kohberger asked an Idaho judge to ban cameras from⁣ the courtroom.

(Reuters) -Social​ media platform X, formerly known as Twitter, was back up on Monday ⁣after facing a disruption in the United States,…

By Richard Cowan and Kanishka Singh WASHINGTON (Reuters) ⁣-U.S. Senate Majority Leader Chuck Schumer will host tech leaders including Tesla CEO ⁤Elon…

By Stephen Nellis (Reuters) – Intel on Monday said a new data center chip coming out next year will handle more than…

SEOUL (Reuters) – South Korea said on Monday it will toughen sentencing for stealing industrial secrets, after concerns that current​ regulation was…⁢